Calderbank v Calderbank [1975] 3 All ER 333 (EWCA) was an important English Court of Appeal decision establishing the concept of a "Calderbank Offer".[1] A “Calderbank Offer” can often be identified by the disclaimer "without prejudice, save as to costs".

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After a marriage of 17 years, Mr and Mrs Calderbank separated and filed for divorce, which was duly granted.

However substantial difficulties arose regarding the division of the matrimonial assets of £78,000, consisting of the £80,000 Mrs Calderbank had previously inherited during the relationship from the estates from the death of both her parents. Complicating matters further, the matrimonial home was registered under only Mr Calderbank’s name (due to fiscal reasons) and he continued to live in this property after the divorce.

The matter was referred to the Family Court, and the judge awarded Mr Calderbank the modest amount of £10,000 (out of the total assets of £78,000), as well as court costs.

However prior to the matter going to trial, Mrs Calderbank had made the following offer via no less than the form of an affidavit "I am willing, and have always been willing, to make over to the [husband] the house at Alderley Edge", which Mr Calderbank declined.

While this house was not the matrimonial home (it was rented by Mr Calderbank’s father, and Mr Calderbank's mother lived there), the trial judge was of the opinion that this house was worth about £12,000, which was £2,000 more than Mr Calderbank later obtained at trial.

Mrs Calderbank, not happy with the outcome, appealed on 2 grounds, first that the courts had no legal jurisdiction to make such a property division, and secondly, and of most legal significance, that as Mr Calderbank had obviously declined a reasonable pre trial settlement offer, he should not be entitled to legal costs for unnecessarily prolonging these legal proceedings.

The Court decided that where a winning party in litigation refuses an earlier settlement offer made by the losing party, the losing party may produce the settlement offer as evidence towards the appropriate level of costs payable. In practice, if the winning party’s award of damages is less than the earlier settlement offer, then the losing party may have to pay less costs to the winning party than normal.

On the facts, the Court upheld the lower court's quantum of the £10,000. However, the Court reversed the burden of paying legal costs from Mrs Calderbank onto Mr Calderbank. The Court held that the legal proceedings had been unnecessarily prolonged by Mr Calderbank's earlier refusal to accept Mrs Calderbank's settlement offer of around £12,000.